Industry trends such as margin compression, the drive for cost reduction and increasing regulatory pressures are forcing banks to seek ways to reduce trade execution expenses and gain transparency, reports Broadridge Financial Solutions.
The financial software group’s findings are in a capital markets industry viewpoint whitepaper titled
‘Key Challenges and Best Practices in Trade Expense Management’
According to the findings, the most sophisticated banks have moved toward a more centralised management of their expenses across business units and asset classes. This has allowed them to gain a more holistic view of their trade operations and promote greater efficiency in areas that include lower costs, negotiating more favourable vendor agreements and better allocation and forecast of expenses to create more accurate profit and loss (P&L) reports and budgets.
However, while most banks agree on the need for a more centralised and automated approach, very few have achieved it due to the challenges of creating a core utility linking various business functions and locations, as well as the need for invoice transparency, data and fee accuracy and regulatory compliance.
“There is a compelling business need and bottom line impact for banks to assess their current trade expense management practices,” said Terence Faherty, head of product strategy for Broadridge’s revenue and expense management solutions.
“Many of the challenges the industry faces around fee schedules are not new; however, there are increased complexities and regulatory pressures. We expect these trends to continue and will result in the need for an automated and centralised expense management utility that can provide a more holistic and data-driven view of the organisation. This approach will allow for improved accuracy and transparency that can drive greater efficiencies and cost reductions.”
Cash-flow based metrics now feature prominently alongside traditional revenue measures of business performance in the key figures or financial summary pages of any public company.
GTNews asks Pugsley about what advice she would give to treasurers dealing with mergers and acquisitions, what the key challenges for her year ahead will be and how she is selecting a treasury management system (TMS).
The US money market fund reforms came into effect in 2016 and are already dramatically shaping US fund industry with investors flooding out of prime funds and into government securities. While the reforms are similar, they are not the same. GTNews interviews Yeng Bulter, global head of the cash business at State Street Global Advisors on the differences.
Tim de Knegt, strategic finance and treasury manager for the Port of Rotterdam, discusses how he is using blockchain, the challenges he will face in his role of treasury over the next 12 months and the advice he would give to someone starting out their career in treasury.